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New and noteworthy—Australian Federal Election policy update

On 9 May 2013, the Coalition released its industrial relations policy.

In the Coalition’s words, the changes proposed are aimed at restoring “the balance back to the sensible centre” so we will not see an “overhaul” to the Australian IR system for at least the first term if the Coalition are successful at the upcoming Federal Election.

Employers should welcome the proposed changes to enterprise bargaining and greenfields agreements among other things which are again consistent with the Coalition’s aim to “restore the balance” between employers and trade unions and focus on productivity.

Changes to the Fair Work Act 2009 are likely to come into effect before the upcoming Federal Election if changes proposed by the Fair Work Amendment Bill 2013 are passed by the Federal Parliament.

Coalition Policy

In the lead up to the Federal Election on 14 September 2013, Mr Tony Abbott, leader of the Opposition, released “The Coalition’s Policy to Improve the Fair Work Laws” on 9 May (Coalition Policy). The Coalition Policy outlines the industrial relations policy platform for a Coalition led Government if it is successful in the upcoming Federal Election.

Key Changes

Hallmarks of the Coalition Policy of relevance to employers in Australia include:

Union Right of Entry. The Coalition Policy is aimed at winding back the right of entry regime for employee representatives as opposed to the amendments proposed by the Labor Government in the Fair Work Amendment Bill 2013 (Bill) that seeks to expand the rights of entry provisions. Under the Coalition Policy, trade unions will only be able to seek entry to a workplace under the Fair Work Act 2009 (Cth) (Act) if the union is covered by an enterprise agreement that applies at the worksite, or the union is a bargaining representative seeking in good faith to make an agreement that would apply to the workplace and there is evidence that the union has members on-site that have “requested their presence.” The proposed changes will not affect the existing rights of entry for representatives to investigate breaches including under workplace safety laws, or represent members in a dispute over an award or enterprise agreement.

Enterprise Bargaining and Industrial Action. Following highly publicised incidences of “strike first, talk later” tactics, the Coalition Policy has responded by proposing a requirement that industrial action can only be taken if the Fair Work Commission (FWC) is satisfied that the talks between employers and workers (including their representatives) have been genuine and meaningful and that the claims being pursued are sensible and realistic. Also, when agreements are brought to the FWC for approval, the FWC will need to be satisfied that the parties have discussed and considered ways to improve productivity.

Individual Flexibility Agreements. The Coalition Policy has promised to remove the current restrictions in enterprise agreements on the use of Individual Flexibility Arrangements (IFAs) to allow workers and employers to agree on conditions that are suited to their individual needs. The Coalition has committed to retain the better off over-all test (known as BOOT) introduced by the Labor Government to ensure that any worker who agrees to an IFA will be “better off” under such an arrangement.

Greenfields Agreements. The Coalition Policy seeks to address the delays experienced in the negotiation and approval of contentious greenfields agreements which essentially hold up new projects. Under the Coalition Policy, the Act will be amended to introduce good faith bargaining obligations on parties negotiating a greenfields agreement. In addition, the Coalition has proposed that it will introduce a three month bargaining “cut off” which will allow an employer to apply to the FWC to approve greenfields agreements if not agreed to within three months so long as the conditions are fair and consistent with prevailing industry standards and pass the BOOT.

Paid Parental Leave Scheme. The Coalition Policy has committed to delivering Mr Abbott’s proposed Paid Parental Leave Scheme that will provide mothers with 26 weeks of full replacement pay. The proposed six months paid leave will be based on the mother’s actual wage or the minimum wage (whichever is higher) up to the cap of $75,000.

Future of Specialised Tribunals. The Coalition Policy has committed to “urgently” review the operation of the Road Safety Remuneration Tribunal (RSRT) and the Fair Work Building and Construction (FWBC), both set up by the Labor Government. Mr Abbott has reiterated that the Coalition will re-establish the Australian Building and Construction Commission (ABCC) that was closed by the current Labor Government with some of its functions absorbed into the newly established FWBC which commenced operation on 1 June 2012. The Coalition Policy recorded that the ABCC was effective in addressing workplace militancy in the building and construction industry and is tipped to provide productivity gains of $6 billion per year once reintroduced. In addition, the Coalition has said it will create a Registered Organisations Commission within the FWC as an independent “watchdog” to regulate registered organisations. Further, the Coalition has said it will give consideration to the creation of an independent appeal jurisdiction for decisions of the FWC.

After the Election

The Coalition has reassured voters that it will not return to the Howard government’s “WorkChoices”, backed by a commitment to not introduce any changes during its first term in Government not already contained in the Coalition Policy. Further the Coalition had said that it will not reintroduce Australian Workplace Agreements (individual agreements known as AWAs), nor make changes to unfair dismissal laws, transfer of business or penalty rates provisions in its first term.

Instead, the Coalition has committed to “keep the Fair Work Framework” with improvements upon recommendations following a Productivity Commission inquiry with a view to take any proposed changes in Policy to the next Federal Election for voters to decide upon.

As it currently stands, opinion polling shows strong support for a Coalition win at the upcoming Federal Election. In the meantime, the Coalition has indicated that it will support the current Labor Government’s proposed changes to the Act to the extent that they are consistent with its Coalition Policy. This means the anti-bullying and “family friendly” measures, proposed by the Bill if passed by the Federal Parliament, could take effect before the upcoming Federal Election. See below for an update on the Fair Work Amendment Bill 2013.

SUPERANNUATION INCREASES—COULD BE DELAYED IF COALITION WINS SEPTEMBER ELECTION

Presently the superannuation guarantee is set at 9% but is set to increase gradually by initial increments of 0.25 percentage points on 1 July 2013 and on 1 July 2014. Further increments of 0.5 percentage points will apply annually up to 2019/20, when the superannuation guarantee rate will be set at 12%.

In response to the Labor Government's budget for 2013/2014, the Coalition has also said that it will delay the staged increases to compulsory superannuation by two years if elected in September 2014.